Lack of system to monitor stamp duty costs TN Rs 809 crore

Performance audit on assessment and levy of stamp duty and registration revealed that the failure of the department to evolve a system to monitor collection of stamp duty resulted in loss of Rs 809 crore in revenue.

It lost Rs 359 crore from brokerage and Rs 450 crore by not collecting stamp duty for bonds issued through depositors.

The government had appointed Bank of India Shareholding Limited as an agent to collect stamp duty on securities-related transactions from brokers. The duty payers are also permitted to pay the amount directly into the government treasury and remit the challan to the government.

The audit findings said that turnover reported involving a stamp duty payment Rs 491.72 crore. But, details provided by the department revealed that from 2011-12 to 2015-16, stamp duty worth Rs 359.69 crore was not collected.

The CAG obtained details from the National Securities Depository Limited which revealed that bonds worth Rs 18,771.84 crore were issued in the State of Tamil Nadu from 2011-12 to 2015-16. However, no stamp duty was levied for them.

In addition, CAG authorities also found that the department had been using an incorrect system of handling documents returned based on court orders, non-adherence of the guidelines of central valuation committee in subsequent fixation of market guideline value, assessment of documents without inquiry and incorrect adoption of rate of stamp duty in respect of instruments of deposit of title deeds.

Similarly, non-verification of compliance to the provision of Income Tax Act, incorrect valuation of deeds of construction agreement, short collection of stamp duty registration fee due to undervaluation of property, failure to adopt guideline rates and failure to disclose correct particulars were among the other shortcoming noticed by the CAG authorities.